Scottish Grand Committee
Tuesday 21 July 1998
[Mr. John Maxton in the Chair]
The Chairman: The first item of business is a
statement by the Secretary of State on the comprehensive
spending review.
Comprehensive Spending Review
10.30 am
The Secretary of State for Scotland (Mr. Donald Dewar): With permission, Mr. Chairman, I shall make a statement about the comprehensive spending review as it
affects Scotland. The comprehensive spending review is
about Labour delivering for Scotland. I want Scotland to be
the best in Britain. This settlement can make that a reality.
I shall first explain the Government's reform strategy since
we came to power 15 months ago. Our first priority was
jobs and we established the new deal in our first Budget last
year. Next came the reforms to make work pay through the
working families tax credit and increases in child benefit
in the March Budget. The Chancellor has raised pensions,
giving security to the oldest and most vulnerable in our
communities, and the comprehensive spending review has
allowed me to deliver for Scotland's schools and hospitals
a massive boost, to set them up properly for the next
century. Jobs, pensions, health and education therefore, are
Labour's priorities the priorities of a great reforming
Government.
This settlement delivers an additional £4 billion for
Scotland in the three years to 2002. It is an increase in
real terms of 6.8 per cent more than £800 extra for every
man, woman and child in Scotland. That is not a hand-out,
the political equivalent of a free lunch. The money is for
modernisation. Our approach is to invest for reform, so
that we get increasingly modern, efficient and effective
services for our people.
We are embarking on a process that will revolutionise
Government spending, making it ever more focused on
outputs rather than inputs. That is why our plans offer
firm commitments on class sizes, nursery places,
classroom assistants and much more. The settlement
offers, for the first time, a three-year public expenditure
deal, which will give extra certainty for the new Scottish
Parliament. Our plans will deliver almost £1 billion more
into Scottish public services next year than would have
been spent under the old Tory plans. That will provide a
handsome start for the new Scottish Parliament.
There are new pledges on education which sum up the
spirit of the settlement: all three-year-olds in Scotland will
have the right to a free nursery place by 2002; 5,000 new
classroom assistants in Scottish primary schools will bring
the ratio of adults to children to 1:15 by 2002, and 42,000
more students will enter Scottish colleges and universities
over the period of the review proof positive that the
Government mean what they say on widening access. The
settlement will, for the first time, make a reality of a
national child care strategy for Scotland. More than
£500 million will be invested over the three years, which
will double what is spent now.
The intention of our pledge to create 5,000 additional
classroom assistants is to free teachers in primary schools
of unnecessary administrative burdens and provide them
with more support that will allow them to concentrate on
their central role in learning and teaching. The new
classroom assistants will be under the supervision of the
classroom teacher and shall introduce special work-based
training qualifications for them.
My second priority is to finance the creation of the most
modern health service in Europe. We promise that by next
March, waiting lists will be below the levels we inherited
and that there will be a £1.8 billion uplift in health
spending to maintain that downward pressure. Waiting
lists will come down and stay down as we invest for
modernisation. The increase in health spending will
further rise by £300 million, to almost £600 million and
£900 million over the three-year period of the spending
review. We shall restore free eye tests for those over 60.
No one can doubt our commitment to the essential
principle of a system that offers comprehensive cover and
is free at the time of need. That will allow the dedicated
staff, who have done so much over the years to care for
the health service, to face the future with confidence.
A £300 million boost for housing will pave the way for
greater community ownership and for more private
investment in our council housing stock. I am determined
to make progress in reducing the debt burden that has
built up over the years.
For local government, the settlement can mark a new
start. We will reward and support local government in the
delivery of vital services to the people of Scotland.
I propose a three-year settlement. Councils have wanted
that for a long time. It will allow them to plan ahead
within a secure framework. Scottish council budgets will
increase by £840 million over those three years. Next
year, expenditure is set to rise by 4.8 per cent. Councils
will welcome the end of crude, universal capping. That is
another manifesto pledge that has been delivered. We are
also allowing local government more freedom in keeping
the receipts from the sale of their own property. That will
encourage greater efficiency.
Tomorrow we shall publish our White Paper on
transport in Scotland. Without pre-empting that
announcement, let me say to the Committee that the
comprehensive spending review settlement for transport
represents a modal shift. We are determined to be radical
and innovative in the face of problems that, if we do
nothing, will simply get worse.
As an important part of our approach to those problems,
we shall set out details of a new public transport fund that
will enable the Government to support integrated transport
initiatives. For example, the resources that we propose to
make available abut £30 million a year would be
enough to provide in a single year 10 bus priority
schemes, two park and ride schemes and three new
railway stations, such as that at Dalgety Bay.
Another manifesto pledge has been honoured. We have
firmly shut the gates on the programme of large-scale
sales of Forestry Commission woods and forests that was
planned by our predecessors. That has not been easy as
we have had to close a substantial gap. An additional
£93 million has been found over the next three years.
I hope that that will ensure that there are no significant
sales and that we maintain the record on access and on
mixed planting that is so important to the environment
and to enjoyment of the Scottish countryside.
We are also investing in Scotland's new Parliament.
The plans allow for a world-class Parliament building that
will be the symbol of the new democracy in Scotland. In
future, Members of that new Parliament will decide what
Scotland's spending priorities are. However, today's
settlement tells the people what they will get from this
Government and from my party: jobs, pensions, education
and health.
The programme is built for Scotland and it is designed
to meet Scotland's needs. It reflects directly the priorities
that Scotland voted for at the election. It will be delivered.
It amounts to a social revolution of which I am very
proud. I commend the settlement to the Committee.
The Chairman: Before calling the first speaker,
I remind Committee members that the statement has no
time limit. However, many hon. Members wish to speak
in the following debate, so I shall limit the statement
accordingly.
Mr. James Wallace (Orkney and Shetland): I thank
the Secretary of State for giving the statement to the
Committee. It is helpful for the Committee to have the
opportunity to consider the comprehensive spending
review. It would be encouraging to hear that the Committee
is meeting again tomorrow to receive the White Paper on
transport.
Over the greater part of the past 12 months my right
hon. and hon. Friends in particularly, my hon. Friend
the Member for Gordon (Mr. Bruce) have urged the
Chancellor of the Exchequer to open his war chest, so it
would be less than gracious of us not to acknowledge
that has been done. I agree with the right hon. Gentleman
that we should examine outputs and the targets that he has
set himself.
We acknowledge that the extension of pre-school
provision for three-year-olds, for which we have
campaigned, will take place. Expanded provision for
classroom assistants is very welcome, as is additional
funding for further and higher education. That shows what
happens when debate in the Scottish Grand Committee is
initiated by the Liberal Democrats. We appreciate such a
response. Reversing cuts in investment in housing is also
welcome. Innovative measures in the national health
service, such as one-stop clinics, instant personal booking
and the free eye tests for all
Mr. Dewar: No, free eye tests are for those over 60.
Mr. Wallace: That is a pity: I was about to give a
particularly warm welcome to free eye tests for all and to
ask the Secretary of State why he does not do the same
for dental checks.
On these occasions, the Government have a tendency
to put the best gloss on their actions. The Opposition
have duty to strip away that gloss, for example, by
pointing out that average spending during this
Parliament will be £13.1 billion a year in real terms,
against £13.5 billion during the previous Parliament.
However, such discussion of the figures often generates
more heat than light, and I should like to ask the
Secretary of State some specific questions.
Over the period of the review, what proportion of
tuition fees will be retained in the higher education
sector? Will the Secretary of State confirm that it will be
100 per cent.?
He mentioned the relaxation of the requirement that
local authorities should use 50 per cent. of non-housing
asset sales to redeem debt. Why has that relaxation not
been extended to sales from council housing? I recall that
the Labour shadow Secretary of State for Scotland was
very annoyed when the previous Government imposed
provisions relating to such sales.
What are the implications for the recruitment and
retention of doctors, nurses and teachers of the
Chancellor's statement about public sector pay? Given
the small reserves set out in last week's White Paper, if
the Chancellor's plans are assailed by higher inflation, and
tax revenues are undermined by growth that is less than
was expected, how does the Secretary of State intend that
the outputs to which he has so clearly fixed his
objectives will be maintained?
When the right hon. Member for Hamilton, South
(Mr. Robertson) was welcoming or rather, not
welcoming the 1994-95 figures, which gave greater
Departmental expenditure limits than any that have been
announced today, he said:
"Only those who believe that inflation will not affect Government
spending will believe the figures and the gloss we have just had
from the Secretary of State." [Official Report, 8 December 1993;
Vol. 234, c. 315.]
If inflation erodes the value of the cash settlement that
the Secretary of State announced, how does he intend to
maintain the outputs?
Finally, when I wrote to the Secretary of State, in
November 1997, about additional money for the NHS,
he replied:
"As regards the Barnett formula, the long standing convention is
that the formula does not operate automatically in-year. This means
that if resources are made available for (or removed from) an
English comparable public expenditure programme the Scottish has
no entitlement to the formula consequentials."
As we are not discussing a settlement for three years, will
the Secretary of State confirm that any increase in an
English spending Department during that period will have
a knock-on effect, by increasing the amount available,
initially to his Department and subsequently to the
Scottish Parliament?
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